GOP Spending Cuts Stalls Job Growth

The GOP promise in the 2010 elections that “getting government out of the way” by cutting spending would create jobs is turning out to have the effect most economists expected – more layoffs.

The cuts in government spending and especially aid to cash-strapped states are causing mass layoffs in the public sector, which in turn sinks the businesses that depend on spending by those workers. The anemic June jobs report indicates that cutting billions of dollars in government spending from the economy is slowing economic growth and job creation to the point that the nation could see a “double-dip” recession.

“It’s basic economics that during an economic crisis of this magnitude, the government must temporarily spend more to get the economy moving and encourage private sector confidence,” said IAM President Tom Buffenbarger. “Government investments in our nation’s infrastructure, transportation and education systems not only create jobs today, it lays the foundation for a new generation of jobs for tomorrow’s workers.”

Federal aid for state budgets was a crucial part of the economic recovery plan passed by the Democratic Congress. That aid provided emergency funding for Medicaid programs that allowed states to avoid deep job cuts for teachers, firefighters, police and other state workers.

The GOP forced reductions in the amount of aid to states before the November 2010 elections and had no plans to renew it after they took control. In fact, the GOP wants more cuts in aid to states in other areas that will cause even more layoffs. The result is the loss of 87,000 public sector jobs in the past two months alone and the loss of 659,000 jobs since June 2010. And, without the federal aid that states could use to weather the recession, the public-sector job losses will continue to mount as they slash education, firefighter and police jobs to balance their budgets.